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India Threatens to Cut OPEC Oil Imports If Prices Remain High

India has warned the Organization of Petroleum Exporting Countries (OPEC) that it would turn to other oil import sources if the organization does not cut the prices at which it is currently supplying oil. India has already received the first shipment of crude oil from the US. The shipment of crude oil which is US$2 a barrel cheaper than Dubai crude arrived at the Paradip port last week.

Calling for an immediate relief from the Asian premium levied by OPEC, India's Minister of Petroleum and Natural Gas Dharmendra Pradhan asked the cartel to give wider consideration to the perspective of consumer countries at its ministerial meetings. India currently sources about 86% of crude oil, 75% of natural gas, and 95% of LPG from OPEC member countries.

"OPEC should work towards "Responsible Pricing" which is important for India for socio-economic and developmental reasons," Pradhan said to Sanusi Mohammad Barkindo, Secretary General, OPEC, during the meeting in New Delhi.

"Three Indian public sector refineries have already placed a cumulative order 7.85 million barrel from the US. In addition, a private sector refiner has also placed an order of two million barrels from the US," Pradhan informed the OPEC secretary general.

OPEC Secretary-General Barkindo is in India to attend the first CERAWEEK India Energy Forum. The India Energy Forum is being attended by a galaxy of international speakers as well as a community of more than 500 delegates from international and regional energy companies, institutions and governments, including the CEOs of Saudi Aramco, Mubadala Petroleum, XLNG & XCoal, board level representatives from BP, Gazprom Neft, ExxonMobil, Shell, Emeron, Chevron, International Energy Agency and others.

Meanwhile, Saudi Aramco, which is India's largest oil supplier, is expected to establish a joint venture with Indian companies by next year. Aramco is interested in buying a stake in the planned 1.2 million barrels per day (bpd) refinery on India's west coast. On Sunday, Indian Petroleum Minister Dharmendra Pradhan inaugurated Saudi Aramco's first office near New Delhi.

"Saudi Aramco's Office in India will help in turning the existing buyer-supplier relationship to a strategic partnership in the hydrocarbon sector. They are also considering establishing an R&D Center in India to leverage the highly educated and talented workforce available in India," Pradhan said.